TransCanada urges Alberta link to
U.S. power grid

CALGARY - TransCanada
Corp. wants Alberta's electricity grid connected to
the western United States, allowing producers to export
electricity from the power plants they want to build
in Alberta.

Alberta needs substantial new generating capacity
as companies pursue projects such as new oil sands
projects that consume large amounts of electricity.

Calgary-based TransCanada has positioned itself to
provide some of that capacity through new natural
gas and clean coal power plants, while it is also
behind efforts to build the province's first nuclear
plant.

Alberta's lack of transmission links, however, means
companies can't send any excess production from new
power plants to other markets. Building new plants
without links to the United States would lead to an
oversupplied provincial market, plummeting prices
and little incentive for companies to invest in new
generating capacity, TransCanada chief executive officer
Hal Kvisle said Tuesday.

“If we were to build a really efficient power plant
today that produces at low costs, it would need to
be about 2,000 [megawatts] in size,” he said in an
interview in TransCanada's Calgary office. “But if
we brought that [plant] on line in Alberta, it would
collapse the market. The power generation sector in
Alberta is facing very challenging times.”

The solution, according to Mr. Kvisle, is to join
Alberta's power grid with the Pacific DC Intertie
system, which links the Pacific Northwest to Los Angeles.
That would enable excess output from new Alberta power
plants to reach buyers in a much larger and more liquid
market until domestic demand grows.

TransCanada has been quietly pursuing developing
a transmission project, called NorthernLights, which
would join Alberta to the Intertie system. While planning
is in a relatively early stage – the link is at least
five years away and would cost billions of dollars
to construct – the 500-kilovolt line would provide
the connection Alberta needs, Mr. Kvisle said.

“The interconnect is essential if the Alberta power
[system] is going to work, and if you're going to
get companies like TransCanada to build big generation
projects,” Mr. Kvisle said.

Last month, Bruce Power, the largest independent
power generator in Ontario and partly owned by TransCanada,
bought out Energy Alberta, an upstart company seeking
to build Alberta's first nuclear plant, for an unknown
sum. Despite that purchase, it's not a “slam dunk”
that a nuclear facility is the best option for Alberta,
and TransCanada will continue to evaluate generation
options for the province that include new natural
gas generation plants, clean coal facilities and hydropower
generation on the Athabasca River, Mr. Kvisle said.

Mr. Kvisle was asked whether he expected public opinion
in Alberta to be against the construction of new facilities
– potentially including a nuclear plant – that would
produce power for export into the United States. “That
kind of thinking is very short-sighted and ill-founded,”
he said. There was similar opposition when companies
such as TransCanada constructed the pipelines that
originally allowed Canadian gas to be exported south
of the border, he added.

“The development of a gas export market has been
one of the greatest successes in Canadian history,”
he said. “Electricity is no different.”